Who is coming on welfare now, and whys?

Most researchers agree the robust economy of the late 1990s was a critical factor in the "success" of welfare reform. Yet "what if" questions lurked in the background. What if the economy declines, what will happen to recently employed welfare leavers? How much more difficult will it be to assist

To answer these questions and to explain the recent welfare caseload increase in South Carolina, Department of Social Services officials surveyed a sample cohort of new welfare entrants, from March and April 2002. One-half of the cases in the agency's universe, and in the survey sample, were new cases; the remaining were recidivists.

The state's economy was weakening, and the logical explanation for the increasing caseload was that more people were being laid off. Results from the survey were designed to help state officials understand the constellation of problems that have brought recent applicants to seek services, with an emphasis on how the recent economic downturn affected them, relative to recent employment and job history. Here's what South Carolina officials found.

Events Precipitating Welfare Entry

Nearly one-half (45 percent) of the recipients interviewed reported loss of a job (either theirs or that of someone they depended on) in the last year but only 11 percent of the sample had been laid off. Personal crises, health problems, and pregnancy were more often cited as their reasons for contacting the agency.

Among new clients, who tended to be younger and less educated than returning clients, nearly 40 percent reported a lost job. In nearly 40 percent, the break-up of a relationship precipitated entry to welfare; more than one-half (52 percent) needed help due to pregnancy or because they had an infant, and 14 percent reported significant child care or transportation problems.

More than one-half of the returning cases reported loss of a job, and nearly one-half described physical health as a precipitating problem, compared to 29 percent of the new cases. Nearly 20 percent reported significant child care and/or transportation problems, and nearly 30 percent reported the recent break-up of a significant relationship.

Fifteen percent of the entire sample reported substance abuse problems, 16 percent reported mental health problems, and 9 percent stated that the precipitating event for contacting the agency was incarceration of a partner or spouse.

Lost Jobs

Recipients who quit their jobs cited pregnancy, health problems, child care or transportation problems, problems with hours or pay, poor working conditions, and disagreements with employers. Those who were laid off cited seasonal or temporary work, business slow-down after September 11, 2001, and physical health problems. In most (75 percent) of the cases in which clients were laid off, coworkers also lost their jobs. Among the reasons respondents gave for being fired was that their employer had been unsympathetic about their need to be absent to care for a sick child.

Deprivations Experienced In the Year Preceding Welfare Entry

South Carolina officials found that 28 percent of the respondents interviewed had experienced one of four serious deprivations in the year before the current welfare spell, and 9 percent had experienced two or more. The four serious deprivations assessed were homelessness, hunger, having to move due to lack of money, and having to place their children with others. Deprivations occurred at approximately similar rates for new and returning cases; 43 percent of those who reported a relationship breakup in the past year recalled experiencing one or more of these four serious deprivations.

Barriers to Employment

Nearly 70 percent of the entire sample reported having at least two or throe reported barriers to employment; (71 percent of the new cases, and 65 percent of the returning cases). Recipients cited such barriers as

* Little or no education,

* Having an infant or being pregnant,

* Physical health problems,

* Mental or emotional problems,

* Transportation or child care problems,

" Domestic violence affecting client.

Physical and Mental Health Problems

Both physical and mental health problems were cited more often by returning clients than by new clients. Nearly one-half of the returning clients cited physical health problems, and 20 percent cited mental health problems.

Older clients were significantly more likely to have physical health problems or to be caring for someone with physical health problems. In addition, clients with some college education were more likely to have emotional health problems (21 percent) than clients who had high school education (15 percent) or less (7 percent). Such emotional health problems may partially explain why individuals with some college education are applying for assistance.

The Need for Job Supports

Only one-third of those who entered the welfare rolls in March and April 2002 contacted the agency for cash assistance; the remainder sought some other type of assistance, such as food stamps, Medicaid, or child care. Some clients turned to the agency for help in seeking child support. They were then enrolled in the state's Family Independence Program. For clients working toward financial independence through employment, job supports, including child care and transportation assistance, are critically important, and are provided as part of the Family Independence Program.

Beyond Welfare Reform

As suspected, South Carolina officials did find evidence of the weakening economy in the survey responses. About one-half of the recent welfare entrants interviewed reported a job loss, and more than one-half reported they had looked for a job before applying (or reapplying) for benefits. Seventy percent of those interviewed stated that it seems more difficult to find a job now than it was a year ago.

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Nearly 40 percent of returning clients were not receiving food stamps when they re-applied, and many returning clients reported chronic health problems. Such clients need help accessing appropriate services, including assistance in applying for Supplemental Security Income. Post-welfare case management could help prevent people from becoming disconnected from available benefits and support, and perhaps, could help prevent job loss.

Like at least 40 other states, however, South Carolina is experience [Text unreadable in original source] budget shortfalls. South Carolina's Department of Social Service, has experienced many budget cuts, resulting in a reduction of more than one-third of the agency's total state funds since the beginning of fiscal year 2001-02. Through attrition and buy-out incentives, its workforce has been cut from approximately 5,000 employees to fewer than 4,000. Yet, the caseload is going up--and many clients have multiple and complex problems.

The state's time limit of 24 months requires efficient assessment and referral, as well as expert case management on the part of our workers. Staff salaries are among the lowest in the Southeast; thereby making it difficult to train and retain skilled social workers in the Family Independence Program. Caseworkers must help people with turbulent living situations, poor health, low levels of education, and, sometimes, low functionality and spotty employment histories to overcome barriers, find and retain work, and progress toward self-sufficiency. This is a tall order. The economy of the late '90s was very helpful in reforming welfare. The challenges facing the agency and others like it across the United States are much greater now. PP

The authors would like to acknowledge the significant contribution of Marty Zaslow and Jennifer Brooks of Child Trends Inc. for their interest in this project and assistance in developing the survey. Special thanks to Linda S. Martin for her review, editing, and support, and to Miriam Mitchell, Mary Jane Le Grand, and Brenda Jackson, who conducted most of the interviews.

Marilyn Edelhoch is director or research and evaluation at the South Carolina Department of Social Services. Qiduan Liu is a senior statistical at the department.